Tie-ups with Mittal on track: ONGC

Oil and Natural Gas Corporation (ONGC) has no plan to scuttle ventures with the LN Mittal group which were finalised during the days when Subir Raha was the chairman.

The oil and gas major is currently talking with the partner group to fine-tune the strategy for trading crude oil and petro products of ONGC-Mittal Energy Services (OMES).

"There is no decision to close any of the joint ventures (OMES for trading and ONGC-Mittal Energy for acquiring oil equity overseas) as these companies promise a lot of value to us in the future. The plans are very much on track," RS Sharma, ONGC chairman and managing director, told Business Standard.

He, however, conceded that there has been some delay in registration of the companies for the trading business to take off. In order to start operations, OMES has to register with oil marketing companies such as Indian Oil Corporation, HPCL, BPCL and Oil India.

"Other details of the venture like the size of the operations, exposures, etc are being worked out concurrently," Sharma said.

The other venture, OVL Mittal Energy, may invest between $1.5-2 billion in the development of two off-shore deep-water blocks that it had bagged in Nigeria in May.

The company plans to start production by 2010 and is currently working on an exploration plan for prospecting the blocks.

"The development plans for the Nigerian blocks are being prepared along with OVL Mittal. We hope to begin production within three to four years," Sharma had earlier told Business Standard.

However, senior government officials have expressed reservations over these public-private ventures. "Such joint ventures are difficult since private and public sectors work in different ways and have different cultures," a top government official said.